Skip to main content

Mick Mulvaney
  White House Budget Director Nominee Mick Mulvaney Testifies on Capitol Hill  CSPAN  January 24, 2017 8:01pm-10:57pm EST

8:01 pm
lower taxes and increase jobs and grow the economy. also joining us katrina ã editor and publisher at the nation. she will discuss key progressive priorities and a republican government. and covered donald trump in a changing media environment. be sure to watch the washington journal beginning live at seven eastern on wednesday morning. join the discussion. >> congressman mick mulvaney cross capital today to visit to civic committees as he seeks their approval to become the white house budget director. next, his appearance before the senate budget committee. it is about three hours. [inaudible conversations]
8:02 pm
[inaudible conversations] [inaudible conversations]
8:03 pm
[inaudible conversations]
8:04 pm
[inaudible conversations] >> good morning and welcome to everyone here. i will call this here in short order. we are here today to consider the nomination of representative mick mulvaney of south carolina to be the next director of the office of management and budget. i'm going to try to keep my opening remarks brief since we have a pair of senators before
8:05 pm
us for going to give some introductory remarks of their own concerning their nominee. president trump indicated his intent to nominate representative of any for this position a little over a month ago. i think we would like to see a confirmed director in place as soon as possible. so i am happy to note that the other committee jurisdiction over omb d ãwe need an omb director in place with so many causing budgetary issues requiring the attention of the new administration and most among these foremost is a $20 trillion debt burden american shoulders. congress needs an omb director who can ãwe can work with to put the nation on a responsible fiscal path. that's why am pleased that he nominated fiscal conservative for this key post. the representative has been vigilant and budget ãand six
8:06 pm
years in congress including his tenure on the house budget and oversight committee. he has been a vocal contributor to the great budget debates of recent years. focus on questions and how he ultimately stopped the federal government from overspending while continuing to fund the country's core priorities and responsibilities. representative mulvaney has been a prominent voice arguing for fiscal restraint, balance budgets and honest budgeting that does not use gimmicks for nonemergencies. i have also discussed with representative mulvaney the urgent need to reform the broken budget process. which has contributed to the budgetary stalemate and recurrent continuing resolutions in which congress now read tinley resorts in order to postpone hard decisions about spending and debt. there is an urgent need for important reforms to the process. such as implementing budgeting and the overhaul of outdated
8:07 pm
budget accounts and concepts that have outlived their usefulness. ultimately, my goal is to produce comprehensive and lasting budget process reforms that puts our nation on a better fiscal path. despite its significance, the preparation of the president's annual budget submission is only one of the responsibilities of omb. as with any executive office omb has numerous governmentwide management responsibilities in addition to budgeting and spending that concern various activities carried out by federal agencies. these include agency rulemaking, contracting, grants management, financial management, information technology, program assessment, personal policy, property management and several others. i particularly am interested in hearing his view on the role played by the office of information and regulatory affairs and bedding agency regulations.this committee
8:08 pm
has been exploring the concept of a regulatory budget as one way to produce a check on the growing burden of regulation on the american economy more so to small business. also since he is the house sponsor with a recently enacted legislation with improper payments, i am interested in his view on how we can reduce the growing volume of improper payments made by the federal government each year. the annual amount reached $144 billion in 2016. the cumulative amount of improper payments densely started counting in 2003 exceeds $1 trillion. senator sanders. >> chairman. thank you very much. and we welcome the discussion that we will be having with mr. mulvaney for this very important position.and i
8:09 pm
would also like to take this opportunity to welcome the new members of this committee. senators ben holland and harris and senator gardner, senator kennedy and ãi look forward to working with all of you. chairman you and i may not agree on too much. but i think we can all agree that president trump ran a very unconventional campaign. and that he told the american people that he would govern as a very unconventional republican. i think that is fair that we can get unanimous consent on that one. and over and over again, in fact the cornerstone, one of the cornerstones of his campaign was that he was not going to cut social security medicare and medicaid. he was not ambiguous about this. he did not say this in an ambush interview at 3 o'clock in the morning. he said this over and over and over again.
8:10 pm
and i suspect that millions of senior citizens of this country and millions of working class people that do not want to see social security, medicare or medicaid cuts for that reason. and i will just read a view of the quotes with your permission mr. chairman. into the record. many of the quotes. that president trump said on the campaign trail. he said on may 7, 2015 quote ã i was the first and only potential gop candidate to state there will be no cuts to social security, medicare and medicaid. april 18, donald trump said quote ãevery republican wants to do a number on social security. they want to do it on medicare, medicaid and we can't do that. and it is not fair to the people that have been paying him for years. and now all of the sudden they want to be cut. august 10, donald trump said i
8:11 pm
will save medicare, medicaid and social security without cuts. we have to do it. people have been paying him for years and now many of these candidates want to cut it. last quotes, march 29, 2016, donald trump said, you know, paul ryan wants to knock out social security. knock it down, way down. he was not medicare way down. frankly well two things, but for when you will not lose, you're going to lose the election if you're going to do that. i'm not going to cut it. and i will not raise ages and i'm not going to do all of the things they want to do. what they really want, they really want to cut it. and they want to cut it very substantially. the republicans. and i'm not going to do that. that is quotes from the president when he was on the campaign trail. now that this is over president trump still sends out a whole lot of tweets. but surprisingly enough i have
8:12 pm
not seen that tweet where he says that. i'm waiting eagerly for that as millions of seniors and working people in this country are. issue that we are discussing today is will the president keep his campaign promises and will he appoint people to his cabinet who will help them keep those campaign promises? now we go to congressman mulvaney. and i want to thank him for coming into our very productive interesting discussion. but, his views on social security, medicare and medicaid are exactly opposite of what donald trump campaigned on. let me quickly run through congressman mulvaney's record.
8:13 pm
may 15, 2011 he said we have to end medicare as we know it. april 28 2008 he said quote ã medicare as it exists today is finished". august 1, 2011 he said quote ã you have to raise the retirement age, lower pay cuts, change the reimbursement system. he simply cannot leave social security the way it is. on may 17, 2011 he said, i honestly don't think we went far enough with the ryan budget because it did not cut social security and medicare rapidly enough. and in fact, just last year congressman mulvaney voted against the budget proposed by house budget committee chairman tom price.and house speaker ryan. they voted in favor of a more extreme budget by the republican committee. this radical right-wing budget that congressman mulvaney
8:14 pm
supported cuts medicare by 59 billion more than the price ryan budget. he cut social security by 184 billion more and it cut medicaid and other health programs by 255 billion more than the budget proposed by chairman price and speaker ryan. this is also interesting. in may 2009 when congressman mulvaney was a member of the south carolina state senate, he voted for an amendment declaring social security, medicaid and us department of education unconstitutional. let me read the text of that amendment. quote ãwhere as many federal mandates in which those that created the us department of education, medicaid and the united states social security administration are directly and violation of the 10th amendment to the united states constitution. that amendment in the south carolina senate was defeated by a vote of 35 to 6. mr. mulvaney was one of the six. in my view, the opinions and ideas of mr. mulvaney are way
8:15 pm
out of touch with where the american people want and more importantly, they are way out of touch with what president trump campaigned on. and while we can all disagree on many issues, i would hope we can agree that if somebody campaigns, i am sure many my republican ãthat you keep your promise. and i suspect that chairman enzi does that. he tells what he feels and he keeps his word. but it does not make sense to me to have a key advisor to the president having direct opposition and what the president campaigned on. last point, i have come during the confirmation review process ãwe have come to learn during the nominating process here that mr. mulvaney failed to pay
8:16 pm
over $15,000 in taxes for a nanny that he employed from 2000 to 2004. here is what congressman mulvaney wrote about the issue in response to a question i asked him on january 11. quote ãi've come to learn during the confirmation review process that failed to pay fica and federal and state unemployment taxes on a household employee for the years 2000 to 2004.upon discovery of that shortfall i paid the federal taxes the amount in question federal i can unemployment it was $15,583.60. exclusive of penalties and interest that you were not yet determined.the state amounts are not yet determined. mr. chairman, this is a serious issue. as you will recall eight years ago senator ãwithdrew his nomination of secretary of ã after it was discovered he failed to pay his fair share of taxes. on this issue i agree with minority leader schumer says
8:17 pm
quote ãwhen other previous cabinet nominees failed to pay their fair share in taxes, then it republicans force those nominees to withdraw from consideration. the failure to pay taxes was disqualifying for democratic nominees than the same should be true for republican nominees. that is the end of schumer's quote. in 2015 mr. chairman, congressman mulvaney voted for a bill in the house that clearly stated and i quote ã any individual who has a seriously delinquent tax that should be an intelligible to continue serving as an employee of the federal chairman i look forward to asking mr. mulvaney questions. thank you for the time. >> thank you senator sanders. before we swear in the witness and hear his testimony, we will hear today a little bit about the nominee from our committee colleagues, senator graham as well as ãand senator graham
8:18 pm
and mulvaney or fellow south carolina hands. and senator cotten said in house with mr. mulvaney. >> thank you mr. chairman. i'm honored to be introduce congressman mulvaney. he is my buddy. we do not agree on everything but i think he is one of the most capable people i have met through my time in public service. and we have a real friendship. we play golf. he always beats me. [laughter] i accept that. he has a beautiful wife and triplets. just remember that when you talk to him. he is sincere. clearly, senator sanders would not have chosen him for his director. i think we established that. why would donald trump, president trump taken man according to senator sanders, that does not agree to anything he stands for? i would argue that he picked
8:19 pm
congressman mulvaney because he understands he knows the budget, he will be a good overseer of the government. he is a practical guide. and he will follow the president. president trump understands everything that you said about congressman mulvaney and he has confidence that this man's ability to do a job for his administration. i share that confidence. to those on the defense side he will follow the call of the president to increase defense spending. he does believe in and reform and i think he is right to do so. to save these programs. so from a personal point of view, i've never had an occasion where he would not tell me exactly what he believed even if he knew i would disagree with him. and he is able to disagree with people in an honorable fashion, he is incredibly smart. he has made it his life's work to understand what is wrong with our government.
8:20 pm
he his dedicated to fixing. one final personal ãi think i voted for every -- i asked myself where did that and appeared reason i did it, i think elections have consequences. and while i disagree with almost every nominee about the basic structure of government, i understood that president obama needed his team and deserved his team if they were qualified. and here is what i would ask this committee to consider. given this man's life experience, his background, the public sector and private sector. his time in congress, do you believe he is qualified to understand how the federal government works and reform it consistent with what the president will direct him to do. i believe that with all of my heart and soul. and i appreciate you listening to congressman mulvaney. in any hard question you can
8:21 pm
ask, you're doing your job. just realized elections have consequences for you as they did for me. >> thank you. senator cotton. >> thank you. -- mulvaney and i have known each other for many years. we serve together and house of representatives.he is a friend and i speak from personal experience when i say he will serve our president and our nation with distinction. the way i see it, the directors chief job is to give president the unvarnished truth. he is a telling president exactly what things cost. partly to his agenda but mostly to the taxpayer. the president of course sets the agenda but he deserves a clear eyed view. not rose-colored glasses there
8:22 pm
for the past six years mick has been telling many hard truths. presenting -- we are spending too much, and shortchanging the military will only cost us more in the long run. he also understands ãfor the big spenders in washington. it is the american people who earned this money through their hard work and sacrifice. he will treat every tax dollar like it was his own. and trust me it means he will watch it like a hawk. many people stopped me to ask about the national debt. it is a huge concern. so with his eagle eyed focus on spending, mick will be a crucial voice. he will represent americans are deeply worried about the burden of where we are leaving our children and while he is deeply principled he knows how to work with others and make progress wherever we can. in short, mick is a fine choice
8:23 pm
to run the office of management and budget. so i urge you not only to advance his nomination but you do so as soon as possible. under the law the president is required to submit budget to congress early next month which will be very difficult without a new director. i hope the senate will also confirm him promptly. thank you for your time today and your consideration of a passionate advocate for the taxpayer, a bold truth teller in my friend, mulvaney. >> thank you senator graham and senator cotton . i will keep my remarks brief. mr. mulvaney is representing the fifth district of south carolina. he holds an undergraduate degree from georgetown university and a law degree from the university of north carolina. he has a husband and the father of triplets.we thank you for joining us today to -- and
8:24 pm
begin with you on testimony but first, under the rules of the committee nominees are required to testify under would you please join me as i administer the oath. do you swear the testimony that you will give to the senate budget committee will be the truth, the whole truth and nothing but the truth? >> i quietly agree to appear before the committee and answer any questions that they might have? >> yes. >> you may be seated. now we have a chance to hear from you. >> thank you committee, dickie chairman, thank you it is an honor to be here today to present my qualifications and my vision for the office of management and budget. i want to thank the president for nominating me and showing confidence in me in doing so. especially mr. graham and
8:25 pm
cotton for their kind words. i want to think especially before we get started my family. as members of this committee know the burdens of our public service often fall on those at home and we do not get a chance to say this nearly enough we certainly do not get enough on national television. i mixed ordinarily proud of the young people that my 17-year-old triplets have become. i do not know if it's because i have been away from home or despite the fact of being away but the fact that they are the young people they are is a tremendous testament to my wife was with me today. the children are back in school. i am extraordinarily happy and proud to have her in my life and it could not be here today if not for the support of my family. finally am grateful for member's of the committee to take the time over the course of the last couple of weeks to get together and talk about the issues as we talked about my vision for the omb if you see
8:26 pm
fit to ãi think we all know that no one, no one can do this job alone. perhaps the member of congress knows better than most many of these have served omb. senator portman, russell, they all served with distinction and they all set a high bar and a good example of how a omb is supposed to function. to serve the president and to work with congress and the american people. if confirm that we use them as deserve the truth about budget matters as do the american people and president. and as the omb it is responsibility to you give and the president the truth. even when it is hard to hear. for the first time in america's history the next generation to be less prosperous than the previous. i know that is unacceptable to
8:27 pm
every single person in this room as it is unacceptable to me. we can turn the economy around. we can turn the country around. but it will take difficult decisions today in order to avoid the impossible decisions tomorrow.the debt has increased that is a number so large. i choose to look after the lens of the ordinary american family. if you were an ordinary american family, equivalent to a $20 trillion debt is a critical ability hundred -- $260,000. american families know what that mean to them and that is what it means to us. i believe it must be addressed sooner rather than later. also fundamental changes are necessary. in the way washington spends and taxes if we truly want to help the economy. this must include the physical path. part of that also means taking a hard look at government waste and ending it.
8:28 pm
american taxpayers deserve the government does official effective and accountable. they earn their money honestly. and they deserve a government that spends in the same fashion. this does not mean taking an approach to the gut budget, our country is more than just numbers. a strong healthy economy also allows us to take care of our most vulnerable. my mother-in-law relied on social security in her retirement. she relied on medicare to help her before she died of cancer. pam and i were happy to have that safety net there for her. pam and i would also like that safety net there for her grandchildren. i would triplets. that being said i know members of this committee would like to know my positions should i be director of omb. i'm not in the position and do not presume what decisions i might make much like the president. i do know what i believe
8:29 pm
however. and i am going to discuss whatever topics you find relative today. i've not been a shy member of congress in my six years here and i do not expect to end that today. or as director of the omb if you see fit to confirm me. i recognize that public service whether it be the state legislature, house, or omb takes courage and wisdom.the courage to lead and the wisdom to listen. i have learned in my time in washington that i do have a monopoly on good ideas. facts and the arguments of others matter. my commitment to you today is to seek a fact based approach and listen to various ideas on how to get our financial house in order. this is also comes with responsibilities, i know you are as familiar with them is everybody and i look forward to talking about those today as well.
8:30 pm
i look forward to talking about all of those issues, my qualifications and whatever you see fit. if confirmed i look forward to working with congress and serving the president to address all of the challenges on behalf of the american people. again, mr. chairman i think you for your time and the opportunity to be here. >> thank you. now we will turn to questions for representative mulvaney. let me take a minute to explain the process for all committee members before we start. each member will have five minutes for questions beginning with myself and senator sanders. following the two of us, i will alternate questions between the republicans in the minority. all members who are in attendance when the hearing began will be recognizing order of seniority.for those who arrived after the hearing began you're on the list in the order of arrival. if it is your turn to be on the list and you're not here you will be moved to the bottom of the list.and you will get to ask questions at that point. when everyone else is done ã
8:31 pm
once all of the senators present have had an opportunity to question the nominee i will always second round of questions if there is interest in doing that. representative mulvaney is scheduled to appear before two other committees this afternoon so this hearing will end no later than 1:30 p.m. to accommodate that schedule. with that i have a few questions. i believe significant savings could be found by eliminating duplication and waste and brought overpayment over the government. you introduce the companion bill in the house legislation signed into law last congress that the federal improper payments coordination act. that was a bipartisan bill that addresses a very real and growing problem. you'll be in a position to help tackle this as omb director. even saw a recent report that the department of defense lost $125 million. i do not know what lost means. you believe that significant budgetary savings can be found
8:32 pm
by reducing duplication waste fraud and overpayment? and what do you see the role of omb in identifying and addressing these problems? >> chairman i think you mentioned in your opening statement, the recent finding that the amount of improper payments has now grown to the historic levels. it has now passed 100 million and on his way to 100 billion on its way to 200 billion. i think it is one of the reasons that the improper payments bill, which i believe senator johnson and senator ã also worked on pass on a bipartisan basis. and and will never forget when we started working on that bill in the house i was working on with patrick murphy from florida. and he is a democrat. we were talking about this one day. and i said patrick it is unusual work on this together. he said you have to understand i'm a democrat and i believe the government should do more. your republican and you probably believe they should be doing less.
8:33 pm
but we all hate ãand i think that's right.i think you hit the nail on the head on an opportunity that we have and i bipartisan basis. improper payments act as i understand it has gotten off to a choppy start. the report that is required by the legislation i believe is either finished or close to being finished. but in terms of actually putting the plan of action into place. it is already behind schedule. and to your point about who can help fix that, the answer is omb. it could use the budget function to make sure the agency is comply with the law. they are required to use best management practices here there several agencies that do a great job of this. my uncle died a few years ago i got a letter as executive of his estate. within a week of his death from social security administration
8:34 pm
saying when you get his next check, do not cash or you will be violating federal law. so clearly there are agencies that do a good job. the question is why aren't those agencies sharing their best practices? that is part of the motivation behind the improper payments bill that we passed. i just think that it is a good time to take it a little more seriously and if given the opportunity and omb i will do that. >> thank you and i appreciate your service and your willingness to serve. it was mentioned in the opening remarks that the ranking member and i noticed that you chose to bring to the attention of this committee, an issue recently identified that resulted in you amending tax returns. can you describe this issue and the board at the attention of the irs or whether it was discovered through an audit? having voluntarily paid any and all additional taxes, fees and penalties that you discovered that you owed? >> i have center. i am happy to discuss it with anyone during my various meetings.
8:35 pm
in 2000 we had triplets. when they came home we hired someone to help my wife take care of the children. in our mind she was a babysitter. she did not live with us, she did not spend the night, she did not cook, clean or educate the children. she helped my wife with the kids. i did not consider her a household employee or purpose is withholding or not withholding. i did not think about it again until two days after the president nominated me for this position. and during the transition i got a checklist have you ever had a babysitter, nanny, au pair, governess or whatever? and i said yes. they sent me an irs circuit. it was the first time i read it. it was immediately clear to me i made a mistake and that the irs viewed our babysitter as a household employee which i should have withheld taxes. i told everyone. i said look, what is the best way to fix this? it is a mistake. now i know about it. how do we fix it? the cpa and i went through the
8:36 pm
process of filing i believe schedule h for the relevant years. we pay the taxes. also notify the irs of what we were doing and why. and then i told everybody on this committee like i told everybody in the senate and apparently the media as well. it is the only thing i need to do mr. chairman. we made a mistake in my family and as soon as it was brought to my attention i knew the only thing i knew which was to take every step to fix it. i will pay any penalties, interest and late fees and abide by the lodge my best of my ability. >> thank you. and to put this in context for the committee in 1993 president clinton nominated mr. brown and mr. kania to be secretary of transportation. both nominees had to pay back taxes on domestic employees and yet both were conference. president clinton also nominated mr. zoe baird to be the attorney general. she had hired an illegal immigrant and failed to pay taxes. while she did not become attorney general she did serve
8:37 pm
in the clinton administration on foreign intelligence advisory committee and in the obama administration on the us secretary of commerce is digital economy board of advisors. in 2009 president obama nominated mr. timothy ãto be secretary of the treasury. even though he failed to pay $35,000 in social security and medicare payroll taxes on his own income, and was in charge of the irs after being confirmed, he was confirmed. mr. senators. >> thank you mr. chairman. congressman trent and i have talked to some members of the house whose views are very different than yours. they say you are a straight shooter. you are honest and i appreciate that. it is a good quality and a member of congress.over the weekend i happened to bump into a psychologist. she told me that her patients are getting very nervous.
8:38 pm
those who are on disability benefits. that they might lose their benefits. and in fact there conditions are getting worse. i have heard that all of the country. people now are worried that they may lose social security, medicare, may lose medicaid, disability benefits. i happen to believe that social security is one of the most significant and important and positive programs that the united states government has. that medicare by and large is an enormously successful healthcare program in effect the majority of the american people would like to see medicare expanded to all americans. something i believe. and that medicaid right now is saving the lives of millions of people. but you are in record time after time after time. anna read the quotes. if they cut social security, cut medicare, cut medicaid. now what concerns me is you are more than entitled to your views.
8:39 pm
you get elected by the people in your own district. but what disturbs me is that we have a president who ran on a set of principles that he would not cut social security and medicare and medicaid and yet he is nominating somebody whose views are very very different. so i have a real problem with that. my question to you is, what will you tell the president when he says i ran on a set of principles i will not cut social security, medicare and medicaid. will you tell the president of the united states congress the president keep your word, be honest with the american people, do not cut social security, medicare and medicaid? >> senator jeff question is what would i tell the president. and i listened as senator ãwas given introduction and i really whether he's said. i didn't know what he was going to say until he said it. when he gave the answer.which is that i, the only thing i know to do is to tell the president the truth. and the truth is that if we do
8:40 pm
not reform these programs are so important to your constituents in vermont and mine in south carolina, i believe in nine or 10 years the medicaid trust fund is empty. in roughly 17 or 18 years of social security trust fund is empty. we can choose to do something about that now or we can choose to do something about that ? >> forgive me for interrupting i only have five minutes. there is a lot that we can do. including lifting the cap on income above $250,000. which would enable us to extend and expand social security very significantly.but the problem i'm having right now is not just your nomination but the integrity and the honesty of somebody who ran for office onset of principles, nominating somebody else whose views are very different. but let me ask you another question. when you're a member of the south carolina senate, you
8:41 pm
voted for a proposition that said social security is unconstitutional. do you believe that socialist security is unconstitutional? wax no sir it was brought to my attention this morning before the hearing. i do not remember the boat but i assure you today i do not believe social security or medicare are unconstitutional. >> you are one of six members of the south carolina state legislature to vote on a proposition that said social security and the department of education, medicaid are in violation of the sent 10th amendment. you no longer hold that view that social security is unconstitutional? >> i've no reason to disbelieve that but again, this in here i will not be arguing to the president of the united states that social security or medicare unconstitutional. >> mr. mulvaney, and congressman in july 2015 you said quote -- i urge house republican leaders to use every available tool to strip planned
8:42 pm
parenthood of every taxpayer funds and to prevent them from receiving taxpayer dollars in the user. some two -and-a-half-million americans, many of them low income women now get their healthcare through planned a time only 28 million people who have no health insurance today, despite the games of the affordable care act, do you really believe we should strip to an half-million americans, many of them low income women get high-quality care at planned parenthood that they should no longer have access to planned parenthood? i hear a lot of talk from my republican friends about choice. you want to give people choice. to an half-million americans, many low income women choose planned parenthood as their choice for healthcare. why would you deny them the choice? wax senator i do not have a letter from me but i do remember the debate. and also what i voted for. and may have addressed in the letter.
8:43 pm
the proposal that the house put forward in july 2015 would have moved the money from planned parenthood to the federally qualified healthcare clinics. which are more prevalent more available and serve more women then ã>> i know about these health centers i am one of their advocates. but to an half-million people mostly women have chosen. all joy healthcare system that allows people to go anything they want, your recommendation is that we should deny to an half-million women their choice of healthcare. thank you mr. chairman. >> thinking. senator graham. >> what percent of gdp will be spent on defense if we go back about ã2021?
8:44 pm
>> that will be down it will be well below four percent. maybe closer to two. between two and four. >> 2.3 percent. what is the historical average of spending since world war ii? >> for. >> closer to five. do support president trumps initiative of increasing spending? >> i do.>> a d ãif you want a bigger army you will have more personal cost. >> that's with the number will tell you. >> are you willing to reform personal programs to make them more sustainable? >> i look forward to have the opportunity to do just that. >> entitlement reform.what drives the debt? what is achieved driver of the debt? >> medicare, medicaid and social security. >> those are two different things. explain the difference.
8:45 pm
>> deficit is this year's shortfalls between revenues and expenditures. the debt is the accumulation of debts over the years. >> the baby boom generation will be retiring and mascara what happens to medicare and social security in next 25 years? >> they go up. >> in 1950 how many workers work for -- >> how many are there today? >> three. >> how many in ãyears. >> are we living longer or shorter? >> longer. >> so we're living longer, fewer workers and more people retiring. those are the hard facts. >> yes sir.>> we told president trump if he ignores that we will not get out of debt? >> yes sir. >> will he tell him the promise that you made about social security will lead to their demise if you do not change
8:46 pm
that? >> yes, sir. >> we told him there's a bipartisan way to do this that has been studied extensively without getting the program for saving the program? >> yes, sir. >> when you will grow ãagree with me that younger workers will have to work harder to get to the program? >> i have already told my children that. >> the social security was saved by ? >> that is true. >> do think we need to look at adjusting the age again because we live longer? >> yes, sir. >> do you think people should pay their medicare bill? >> i believe medicare benefits should and could be means tested. >> what percentage of medicare comes from the general treasury? >> senator, that is when i do not know.>> i think it is over 60 percent. isn't it true that if we do not change that medicare, medicaid and social security combined will consume all of the revenue
8:47 pm
that the american people spend in taxes by 2042? >> yes, sir. i think this year we will be close to 75 percent for just those three major programs alone. >> is an entry if we do nothing we will have to either dramatically increase taxes or cut benefits in the next decade to 15 years? >> if we do nothing, then by the time i retire there will be across-the-board 22 percent cuts in social security benefits. >> are you in a situation where you can give up some of your promise benefits from social security if you had to? >> senator if i may, i enjoy this this is what we do when we talk right?i would take a second to tell a story. i talked about the ideas that save social security at a sun city retirement community in my district. you have been there several times. i talked about slowly raising the retirement age and there was a gentleman there who is
8:48 pm
59. give me 55 to live there. and he said well i don't want to work until i'm 70. and i said no, our proposal would require that you work an extra two months. and he was flabbergasted. he said wait you know i can fix this by working two more months? and i said yes. he was angry that it was actually that easy to do. and i said well if you want to really be angry, if we had fixed it 20 years ago it might be two extra weeks. but if we wait another 10 years and might be two years. so we do have the chance to fix these ? >> let's get back. very well said. senator sanders said that one way to save social security is to increase, lift the cap on people who make over $250,000. can you repair the gap between medicare and the unfunded liability by doing that? >> no, sir. as i told people ? >> you cannot even come close. >> no, sir.>> of each of the entire one percent everything including the dogs, could you repair the gap? >> you can confiscate everything and the answer would be no.>> could you where the
8:49 pm
economy at eight percent and close the gap? >> no, sir. >> thank you. >> thank you very much mr. chairman. welcome congressman mulvaney. to you and your family. i had to say after that interchange, i think folks on social security and medicare ought to be really worried. and just demonstrating the difference between what president trump has indicated he would do and what in fact you will be advising him congressman mulvaney. if in fact, you indicated as senator cotton indicated, you would give him the unvarnished. so i believe people sitting on this side, i believe medicare and social security have great american success stories that have lifted a generation of seniors out of poverty. and created healthcare that certainty for many many
8:50 pm
americans. i am thinking after that exchange that for the 57 million seniors and people with disabilities and surviving spouses and children who receive social security benefits, the alarm bells should be going off right now. let me go back as a straight shooter which i certainly respect. you did indicate that social security is a scheme. is that something that you will say to the president and you did indicate that both social security and medicaid and the department of education were unconstitutional. so just keeping it to social security, do you intend to indicate to the president that you believe social security is a ponzi scheme? >> thank you for that senator. i had a very similar
8:51 pm
conversation with senator sanders in his office and he asked me about that. i said i described as a plan that takes money from people now in order to give money to people now. and he explained and i think he was accurate. social security has always been like that. so i would not read too much into the description of it as a ponzi scheme. it is simply describing to people how the cash flows. and the difficulty that we face was contained in what mr. graham just went through which is 50 years ago, 15 people were paying and one person was taking out. by the time my kids are paying for my retirement, two were paying and for everyone paying out. >> it is also true though, you and i talked to the office about the fact the we are sending was set a wild at 90 percent of wage income. and it goes up a little bit. but one significant way to take a burden off of social security and keep it going strong for those who rely on it and by the way about the third of seniors
8:52 pm
basically live on the money solely from social security. maybe a little bit of a pension but pensions are being challenged right now as well. so, do you think they should be increased as a basic sense of fairness in terms of the fact that the last cap was set in 1983? >> thank you for that.if the senate feels bit to confirm the senator. i believe had his conversation with everyone from both parties that i met with. including the independence. there is really five levers in social security. >> i understand all five. i have one more question want to ask after this. i know there are five. i'm asking about one. >> in dimension one and i think if you pull one lever you have to pull it a long way. and if you pull three or four or five levers you do not have to pull them nearly as much. >> thank you. and i want to completely change to something that i may be the
8:53 pm
only one to raise other couple of tallies may as well. that is a very important part of the budget called the farm bill which is less than two percent of federal spending. it affects every small town in michigan, every farmer as well as the food assistance programs. in the last go around we were very proud and a bipartisan basis to be the only committee to actually cut spending. in our own jurisdiction on $23 billion. and we are now coming into another time where we fully expect to work together on a bipartisan basis to invest in rural economy, small towns, agriculture, food programs and so on. were any better position in a sense that food program spending is actually going down because the economy getting better but do you intend to propose reductions to farm bill and investments and rural america in your budget? despite the fact that farmers and families are ready
8:54 pm
contributed significant savings towards the deficit reduction? >> another farm bill is important to you as it is to many other members including ã who i spoke with us about. i apologize it has been several years as the house has taken it up so i am not in a position to give you an intelligent answer to the question. i look forward to talking to members of all parties out how to both maintain and improve and make more efficient. the farm bill. >> thank you. >> senator toomey. >> thank you mr. chairman and congressman mulvaney. welcome and thank you for being here. thank you for your willingness to serve and thank you for the great work you have done and house of representatives. let me follow on a couple of the subject matters that have been raised. first of all is it your understanding that historically the reason that we have had a cap on the wages subject of social security tax is because we also have a cap on the
8:55 pm
benefits that are paid out. ? >> yes it is. >> and additionally if we limited the we would not solve the problem? >> yes. >> getting back to the bigger budget picture. is my understanding that today the revenue of the federal government taking in as a percentage of gdp is greater than its post war historical that your understanding? >> yes it is 18 and a half or 90 percent.>> the average is 17.9. so we are taking in more revenue than historically. discretionary spending ãand some recent years absolute. >> that is correct. >> so revenue is higher, discretionary spending is lower than historically but yet a large deficit and projection that they will get worse. is it pretty unavoidable to look at the entitlement programs and acknowledged that this is the problem? >> it is a problem and i think congress has done a pretty good
8:56 pm
job over the course of the last couple of years. to deal with the discretionary part of the budget. one of my colleagues suggested that the people on social security should be concerned about the things that you said. ãif you are a pennsylvanian who is in his or her i don't know, early 70s and has modest income and depends on social security are you advocating cuts to their benefits? >> no, sir. >> you are not? what about someone who is 69 and receiving social security. are you kidding that their benefits because? >> i do not think any proposal of the house come up with and no proposal that i would take to the president should i be confirmed would suggest that we touch both anywhere who are ãi am not making my parents go back to work. there 74 years old.that is not what this is about. this is about trying to preserve those programs. those folks, the folks who are
8:57 pm
75 years old and relying on social security, be in pennsylvania or in michigan, they do not have to worry about that. >> anybody of any age on social security where you want to cut benefits? >> sorry sir? >> is there any age on social security that you want to cut benefits that they are receiving now? >> no. >> you do not want to cut benefits? >> no sir. >> that is not clear to me was going on social security's to be afraid of this. how about someone who is 40 years old and expected to work for another 25 or 30 years. can we deliver on a promise that social security currently makes to that person. is there any way that without change to the structure of the program we will be able to follow through on that commitment? >> without changing the current social security program, a 40-year-old today will receive roughly 77 percent of what they have been promised for their adult life. >> so to continue to can suggest we don't have to do a
8:58 pm
thing is dishonest to the young people. and if i understand correctly, the changes that you had advocate will be for people to have many years left in their working lives to plan accordingly and to prepare for the eventuality. is that fair? >> correctly require i think one of the proposals would require me to work an extra couple of months before i retire. and it would require my children ãlexi or how old? >> i am still 49. >> i think it is public information. let me switch quickly to the regulatory side. when i met with small business owners and other people who are working across pennsylvania, they have been stunned by the avalanche of new regulations. and the cumulative weight of all of these regulations whether it is obamacare, epa, the entire alphabet soup of agencies. in my view, and i have heard this from them, it is having a
8:59 pm
devastating effect on economic growth. the omb directive is responsive for regulatory affairs and in that capacity, you have a lot of say about new regulations. number one, do support the rains act which would, which would hold any major new regulation has to be approved by congress before it goes into effect â>> i do sir and i voted for that. >> how do you feel about a regulatory system where before we impose new regulations, we look at outdated excessive counterproductive regulations and repeal them before -- it has probably been falling short on that. i think is actually the law already. >> lastly, how high a priority do you think the administration should assign to rolling back
9:00 pm
the current level of regulation and do you have any other procedures or analysis that you would intend to use to achieve that? >> thank you senator. my very distinct impression from working with the transition team is that regulatory reform will be an absolute priority for this fact i think you so mean to mention yesterday was to cut 75 percent of the regulations is absolutely been serious about this.i believe he is the first person to campaign for president on regulatory reform since ronald reagan. i have some plans or ideas how omb can help to do that but i absolutely believe you will see this be a priority for president trump. ...
9:01 pm
i would suggest to you that on our side of the i/o there may be a broader appetite for the regulatory reform if there were not simply a device to put over helping wall street and big polluters and i would urge you to explore that. second, you indicated in response to the question regarding lifting the social security contribution path so that high earners are not kept from contributing to social security. the question was we wouldn't solve the problem and you answer a simple yes but isn't that true it would contribute
9:02 pm
significantly to solving the problem it is one that should be on the table. >> as i mentioned, we could raise the retirement age to 100 that would solve the problems. you could pull every lever a long way and take the tax rate to 70%. >> i want to make sure you don't dismiss tha it because it affecs high income people. >> my intention is what you and i discussed. if you want to look at social security, here are the firefly verse. >> one of the things we focus on is how you balance the budget and what we have here is different levels of expenditure is over on the far right is $560 billion in 2016 for the nondefense discretionary appropriated budget. 607 billion for the defense
9:03 pm
discretionary, 910 million out the door in social security, not counting what comes in command 1.1 trillion all of the health care programs together. medicare, medicaid, veterans benefits, the works. what's here is tax expenditures. it's another way of spending money for people. we've had ronald reagan's budget advisers say that you've got to get after the tax expenditures it is another way of sending money. it is a particularly tricky way because it helps people pay taxes to get a big benefit to pay the tax code an and corporations on billionaires and so forth and it tends to be baked into the tax code. unlike the appropriation you have to fight for year after year in the committee, there is,
9:04 pm
there it sits and there it stays. the problem i have with some of my colleagues on the other side of the aisle as they talk a big game about the debt and the deficit. but when it comes to the biggest expenditure, the tax expenditu expenditure, we cannot get them to budge on anything, not the carried interest exception that left the billionaires paying the tax rates, then the chauffeurs and truck drivers, that is an outreach from simple fairness. they get big subsidies from the taxpayer and it makes no sense. private jet owners can depreciate faster than the airlines. it makes no sense. we can't get one piece of that through the other side of the aisle. they will go to the mat to defend every special interest. in my experience, we've never
9:05 pm
been able to do it. so if you want to put something together on this, i would urge that this administration that's different from everything else he does and just allied to the republican special interest to take a hard look at the tax expenditures. more money goes out the backdoor of the tax code and to any of these individual programs. >> it may be that you get to a different avenue that you made a very effective case for why we need tax reform in this country. that being said if i can borrow your grass, that would be great. you've got it. >> senator corker. >> thank you for being here. you told me in the office that being the omb director was your dream job, so you are slightly odd but i think you for your desire to want to do this.
9:06 pm
[laughter] i was looking at the forecast laid out today. we've $20.355 trillion over the next 9.7 years for excuse making the next ten years we will have 9.7 trillion in debt. and in spite of some of the comments that are set, i think that there is a large group of people that realize people speak a great deal about pulling the rug out from under seniors and i don't think anybody has ever proposed anything like that. but we are all disgusted at our software the immorality of living today in comfort on dealing with issues that we know are going to be hugely problematic. you believe this is one of the biggest threats to the nation today?
9:07 pm
>> i do and that sink in for me when i arrived at 2011 i was fortunate enough to get on the budget committee in the house and i can't remember if he was there or someone was talking to the presentation to the chairman of the joint chiefs of staff had recently made a comment that he thought the national death was the greatest threat to the national security in the united states and is a new member of congress, that put the fear of god. >> only 31% of expenditures are discretionary spending and i find out actually what you said earlier i certainly wouldn't want to focus on the other side of the aisle but my guess is that the there are numbers of them that would be willing to look at all five of them to solve problems and so actually, i find your views today to be very much in the mainstream. but these are the kind of things that we know we need to deal with with the two workers down
9:08 pm
the road for every person retired. i think most of us fear that we are not going to deal with this issue and we are going to be in a crisis mode. mr. trump did say some things during the campaign that i wish he hadn't said that are totally unrealistic and it made no sense whatsoever. i just wonder if your sense when you talk about him about the fact that it's impossible to balance the budget with 31% of the main discretionary is without dealing with these other programs. senator graham made his comments during his opening statement which i mentioned i haven't been quiet and shy since i've been here. i have to imagine the president
9:09 pm
knew what he was getting when he asked me to fill this role. >> it has to deal with all these issues. the people that introduced you we have the utmost respect and admiration. do you think that is an intelligent way of using the budget and the overseas contingency operations year after year as a way of solving the budget problem? cynic i think that it's beyond not being intelligent. >> let me ask you this in spite of the fact d that you think the pentagon is well-run?
9:10 pm
>> i think it is a good job of defending the nation. >> do you think it is a well-run organization? >> i look forward to the investigation as possible. >> in the name of patriotism when we get to the end of the budget and at the time we are getting pressure placed on the pentagon to start doing some things that it should do but let the pressure off in the way that we do and to me it is irresponsible, and i hope that you are going to correct this. i know my time is almost up and we talked about freddie and fannie handed the two organizations that had to do with housing reform. it's your belief that anything that is done relative to reforming the housing finance system and dealing with the conservatorship that fannie and freddie are in and any of the should be legislated by congress by the executive branch is that
9:11 pm
correct? spec that is correct. >> i want to follow-up on the last comment i was gravely concerned about the conversation that you've introduced that allowed basically a recap and released last week in his hearing and also agreed that we needed to do this legislation and it would greatly enhance the financial position of a lot of hedge funds and would bea leavea system in place that would allow private sector gain.
9:12 pm
my hope is that you would not advocate the release approach. >> the house and senate have different idea ideas that we are heartened by the idea we are trying to get to the scene and to protect the taxpayer. i believe the legislation would not address that. i have a couple other areas. again, one of the things i did like about what he said is that united states is the reserve currency of the united states of debt obligations and sacrosanct. the government shouldn't have the ability to prioritize the payments and there should be no uncertainty when it comes to paying the bills. although, in the house, and you
9:13 pm
voted for the three organization to repay the bond holders. it would undermine the full faith anfaith and credit and mot experts have said that the scheme would be a disaster. do you still share the view that the prioritization is the reasonable approach and weapon that could jeopardize the full faith and credit of the united states? >> whether it is a conversation talking about the principles involved, i do think that the gao letter isn't in the law but it's good guidance. >> i sincerely disagree with you and we can continue this. i want to also -- i appreciate your comments about social security.
9:14 pm
i would take exception to what the senator from pennsylvania said. it is true that the revenues are above the 50 year average and i would point out we have run deficits every year at that average and as a matter of fact the united states when you consider federal, state and local taxes combined is the 31st out of the 34 nations in terms of total revenues. we can argue these areas but you also signed doug grover norquist no tax pledge. if you are willing to take a look at the revenues, social security revenues in terms of the tax reform, are you going to be able to remain faithful to the pledge, or do you think having all things on the table would be a more appropriate role if he were accepted the? >> the pledge applies to the candidate for office which i'm
9:15 pm
giving up if you all see fit to confirm me so i will not be bound to that for telling the president the truth and what i believe has options to be. >> if you look at both sides of the balance sheet and list the various social security is one of those would be looking at additional revenue. when we met, i am concerned about the administration's current position on the federal workers. they view it as a calling and they put in place a high hearing freeze and he says that is to address the dramatic expansion of the federal workforce in recent years. what are you aware that the size of the workforce relative to the country's population has actually declined dramatically over the last number of decades and that it's actually smaller
9:16 pm
now than it was? are you aware according to the gao, nearly one third of the federal workforce is eligible for retirement between now and 2013? >> i was not aware of that. >> do you think we will recruit and maintain the best workers and they will have to do a job that continues that is going to be challenged as we all look at ways to get the budget into balance? how are we going to do that when we have disparities between public and private when we send these kind of messages about the value of the federal workers and how we reinforce that statement that right now is very concerned? >> the federal government probably could do better dealing with employees that are exemplary and those that fall below the expectations and all we can say is the look forward to figuring out a way to solve both ends of the problem.
9:17 pm
>> senator kennedy. >> i am new here and i want to share a perspective americans are very frustrated about what goes on here. if they believe the country was founded by geniuses and it's being run by idiots. they look around and see an incredible things happening to the country. our people can unravel the human genome and take a disease to the human heart replace it and make it beat. they send a person to the moon. but the representatives cannot balance the budget like they have to do at home or in their small business.
9:18 pm
here is what i would like to know. if you were the king for a day out with you balance the budget? >> i'm trying to remind myself. we would grow the economy first, senator, and that's probably the only way that we ever balance the budget given the political situation that exists. there are folks among us would want to take a slice of the pie and i don't think that is a formula for success. a >> grow the economy is one, what else. >> if you end up with ten years of growth, you talk about doubling the size of the economy that doubles the size of the federal receipt and allows you to balance the budget. in fact i think that it was
9:19 pm
mr. whitehouse but correctly pointed out one of the things we were able to balance the budget is when the economy was growing so rapidly. in 2012, a very accomplished physician rand cms and testified for congress that 10% of the medicaid expanding its fraud by patients and providers. for some, not all there is not the incentive to combat fraud. is there a way that you can use the power to incentivize the states to try to combat medicaid
9:20 pm
fraud? >> i don't go off the top of my head. i would be happy to take a look at that and give specific instructions to ask for doing exactly that. one thing is he will not tolerate that type of waste and fraud that you mentioned. we have too many undeserving people at the top getting bailouts as sheldon pointed out
9:21 pm
and we have too many undeserving giving handouts and the people that the metal gets stuck with the bill and they cannot pay it any more because their taxes have gone up and their kids tuition has gone up. do you agree with that? >> that was the theme of the inaugural speech but they have been forgotten for so long it will not be forgotten anymore and he will listen to them and i will do whatever i can to help him do just that. >> i think that he will do a great job at the omb. >> thank you, congressman. in announcing as a candidate in october that she would do a
9:22 pm
federal hiring freeze, the candidate said that it was necessary to reduce the corruption and special interest coalition. i'm not really comfortable commenting on that. >> a3 is has a lot of the affect on people seeking to work in the trump administration. why would there be an assumption that people work in the administration to come with corruption or special interest problems? >> i don't think there's an assumption hardwired into any system. i think that you and i both know -- >> i am happ >> i am happy to hear that you don't share the president's view on this. do you have legislation on hiring freezes said if three people left by attrition or got other jobs my understanding is now announced yesterday it is
9:23 pm
even more strict than that. i'm happy to talk about my own bill if you like. about blogging of the social security claims and the veterans benefit claims and backlogs in getting drugs permitted to potentially life-saving drugs to go on the market. i'm concerned hiring freezes are already seeing the effec effectf even making it harder for citizens. am i wrong to be concerned about that? i don't think it follows.
9:24 pm
it is a blanket high hearing freeze under the administratio administrations. did you vote for that? >> i believe i did, yes sir. >> there've been reports that the incoming administration -- >> i believe that he may have been contained in the rules package this year. there've been reports that the incoming administration is trying to gather intelligence about whether employees work on priority is they don't like for example those that worked on
9:25 pm
climate activities. were you aware of those reports? you were not aware that they would be sort of intimidating those that worked on the priority is the president doesn't share a. >> the high morale and high performance. gathering information about employees to work on priority is the new president doesn't share into supporting the role that could target goes for the massive salary reductions likely to build a high morale and high performance organization? >> i think that rhetoric caps into a concern shared by many including yourself. there are those that don't live up to the expectations. >> we shouldn't feed it wit paia broad brush. >> in your prepared testimony you said i don't know how to monopoly on good ideas and the argument of others matter. i will be loyal to the facts and
9:26 pm
the american people i served. but we ask you some questions about the fact. the full repeal would cause many people to lose health insurance. >> that is a true statement. >> a full repeal would be a massive tax breaks for wealthy americans because of the higher the taxes agree or disagree? >> i don't think anybody is proposing that we repeal without replacing. it would be $350 billion per year over ten years.
9:27 pm
the full repeal for the drug cost under seniors medicare part d. because of reopening the doughnut hole. >> i am not sure about that one. >> climate change driven by the co2 emissions is a huge risk. agree or disagree? >> we are not sure the nexus between the operations. >> climate change driven by the co2 emissions is a huge risk. it is a huge risk. >> i challenge the premise of your fact. >> the federal workforce is at its lowest as a percentage of
9:28 pm
the workforce agree or disagree? >> i have no reason to believe he wasn't telling me the truth. >> senator johnson. >> i want to thank both of you and your family for your willingness to serve. i think when we met you said crazy that -- >> i've been called worse. >> as an accountant and as a businessperson what drives me nuts in the federal government is the lack of information, cherry picking information. i think we've seen some of that already today. what are the greatest threats facing the country today? we are not facing up to these problems. i want to talk to you about the information that is going to drive this, but i want to go back to senator kennedy talking
9:29 pm
from my standpoint the component solution which is growth. let's talk about how effective that would be if we go from two to 3% added to the economy. two to 4% is $29 trillion. even with the economic growth we have had since 2009, the revenue flow within the federal government increased by $1.1 trillion. so focusing on economic growth is the number one component of the solution. for me that there are different elements and i want to talk about two of them because they've been completely falling as the omb director. the first one is energy and it looks lick the administration is dedicated to utilizing resources which is a good thing. we have to reform the tax code. it's a disaster between two or $3 trillion to comply which is part of the regulatory burden. we have numerous studies coming close to $2 trillion per year in
9:30 pm
federal regulations. the bird has 14,000 per household -- the burden is 14,000 per household. let's focus on providing information so we can actually start managing the federal government properly. social security, no let's talk about the debt and deficit. the next 30 years, the deficit will accumulate $103 trillion. that is tacked onto the $20 trillion. we are talking about social security. of the 103 trillion, 13 trillion is in social security. 34 trillion is in medicare. over $50 trillion is in the debt so if we don't want to pay over the next three years from a $6 trillion we have to address social security and medicare. ..
9:31 pm
>> the american people want information to address these problems. >> senator, you left off one at the risk of trying to correct the senator. >> be my guest. >> there's a report out, can remember it's it's 20542044 were under the current baseline the assumption that things stay the way we are, 100% of the mid 2050s 100% goes goes to one item and one item only.
9:32 pm
none for social care, no for national defense or any of the things we talked about today. that frightens me. i don't want to be alarmist, but the point is we have allowed things to get in a bad situation. and now falls to us to make difficult decisions. when i see my job and why do i think i might be good at it? my job is giving some hard facts to some important people under difficult circumstances. i think i have the ability to do that. it's not a easy to go to a retirement community and tell people look we have to talk what ways to fix social security. i think that pales in comparison of walking into the oval office and say here's where we stand on social security, medicare, and all the other items. it's not easy to do. maybe i am crazy for wanting this job a summary has to do it. we can't get to a point where
9:33 pm
people said i didn't know this was going to happen. we know it will happen. >> my only question is are you dedicated to providing this information in the facts so we can start and in the denial of reality because this is clearly unsustainable. >> this is one of the few things that would allow you me to leave my family for the next several years as long as the president would have me so that i could do just that. i could look at my kids 20 years from now and say that the time i was away from you from age 11 until age whatever was worth it because i was able to do exactly what we just said. >> thank you mr. chairman. it is great to see you, it is good to serve with you in the house on the budget committee. i have told my colleagues to have my viewer if you are straight shooter and that if you had a consistent set of views i would argue many places
9:34 pm
consistently wrong, but clearly you held your positions and have been in your communications with members of this committee. one area where i think you got it right think it came out in the questioning was with respect to the fact that congress has tried to use the overseas contingency account, as a slush fund in order to escape the budget agreement. do you still hold the view that is a runaround on the budget agreement that a for going to address those issues we should address it in a straightforward manner rather than what was referred to as a dishonest manner. >> i think this has become a unorthodox state on both parties is that everyone admits that the war budget is used for that specific purpose. in fact, i think it think it was part of the omnibus agreement last year
9:35 pm
to use it for items that were not war related. >> on you agree that is an abuse of the budget process. >> i do. it's not emergency spending. imagine if the budget was balanced. >> but you agree it's abusive the process and as omb director of confirmed you'll not pursue. >> how look forward to talking to the president by was not a good way to spend american taxpayer dollars. >> my concern was on issues raised earlier by senators. one issue was about the debt ceiling. we're introduced over the weekend about the expression alternative facts. is omb director we have to be very rooted in reality and not to an alternative reality. here's what the former chief republican economist of this budget committee said about
9:36 pm
getting too close to the debt ceiling, not even going over. >> quote new research and academics about the gao indicates the movement for expiration of a company by increasing the governments cost of issuing new debt. translation, taxpayers pay more. douglas egan, former ceo director quote, failure to raise the debt ceiling leads to very bad economic outcomes and chaos in the financial markets. translation, it hurts the economy economy and it hurts working people. human part of legislation that suggests the federal government could violate its obligation. so long as it wasn't an obligation of bondholders that would be somehow acceptable. is omb director will you abandon that view or continue to pursue that view?
9:37 pm
>> certainly bumping up against the debt ceiling is undesirable. there are additional facts which is historically, and this and this goes back to the roosevelt administration, the debt ceiling is always used as number two to do to sit ask why we have to raise the debt ceiling again. so it has regularly been used to try to pass reform legislation. >> or do you dispute the finding that it cost the taxpayers over a billion dollars last time we had a showdown on this issue? do you dispute that finding? you. >> i don't dispute was short term costs. >> and we didn't even preach it. so obviously if you breach it can have a huge cost to taxpayers. let me ask you a question about earlier charge. >> it's absolutely true that the
9:38 pm
tax expenditure category was far greater than what we paid social security. if you had up all the tax breaks and loopholes on an annual basis that's a greater number than we spend on social security and discretionary spending. the president said he wants to close the tax break. will you agree to close that tax break for the purpose of reducing the deficit and the debt? >> i haven't been able to talk with the president. i look for to having a conversation. i've seen various tax reform proposals that do that. >> it's a simple question. it goes to your statements about how important it is to reduce your deficit and debt. you have site come in the past the pledge that says you will not reduce one tax break for the
9:39 pm
purpose of reducing the deficit. that every contribution from closing the carried interest tax loophole has to go into reducing tax rates for somebody else. if are going to address the dead are we going to have to look at new tax revenue including closing down special interest tax rates for that question. >> one answer would be to get through that is to grow the size of the economy. to the size i think i mention this going for. i recognize and expect and walk him but i've been a representative of 750,000 people home to advising the president of the united states. >> thank you. >> senator grassley. >> in our office meeting we discussed the continued inability of the defense department to get its folks in order so that a clean, financial audit can be justified without accurate and complete financial
9:40 pm
information the leadership doesn't know how the money is being spent and what things cost. bad information leads to bad decisions. it's important that you is omb director take a personal interest in getting the defense department's audit initiative back on track. unfortunately the upcoming statutory deadline of september 30 of this year that was set six years ago to be audit ready is becoming a sham. it's it's time to deploy finance and system that can generate a reliable system were clean house. so i hope you are willing to hold the defense apartments and feet to the fire and see that they're taking meaningful action to be audit ready. that's a question. >> yesterday. and i have been more than a little pleased about my brief discussion so far and then they
9:41 pm
share your, my in the president's commitment to driving efficiencies into the defense department. >> the next question leads to the point that your work is management director as opposed to budget director may do more good for country. i don't have a question, but i would like you to hear me a and commit to consider my point of view on pending regulations relating to the immigrant visa program. was intended to bring much-needed jobs in capital to rule and economically distressed areas. as we have proven over and over, the b5 regional center program has been plagued by fraud and abuse. the obama administration produced regulation, thank god to improve the visa program. the
9:42 pm
regulation would clean up the program by stopping gerrymandering and increasing investment levels from the first time this program was created. i bring this up because right now these regulations were published last week and need to be finalized by the trump administration. this is a bipartisan and issue and all judiciary leadership in both the house and senate of the house and democrat support the regulation. i hope you'll take our support for these regulations seriously. >> i will. and i was pleased to have the opportunity for you to inform me of things i was not aware of. for example gerrymandering issue. i will take to the president given the opportunity. >> the chairman brought this issue up and i want to bring it up in a different way. i've work for years to tackle
9:43 pm
abusive federal charge cards. in 2012 congress passed the ministration to his establish a set of controls for the agencies that they must have in place to prevent misuse of government issued charge cards. your agency is in charge of issuing guidance in ensuring agency compliance while there has been reductions in abuse agency must remain vigilant, omb needs to make sure they continue to comply. i know you are an active member in congress to reduce improper payments. will you commit that omb, under your leadership will remain vigilant in ensuring agencies do everything they can to prevent misuse of government issues charge cards? >> this president will not tolerate the type of abuse you just reference. you have my commitment to do as
9:44 pm
you request. >> the previous administration believe deficit spending in order to best that help the middle class see po has analyzed long-term consequences of long-term spending. they found it for future years a growing portion of the savings will go towards buying government debt rather than productive capital investment. that crowd in out as you know. the smaller capital stock will result in lower wages and income making future generations were soft. this might sound like a softball question. it's very basic, what is your view on the impact of the deficit and debt on future generation? >> number so i have seen would indicate that can retake when debt approaches 85% of gdp you start to see real effects of
9:45 pm
crowding out. there's a correlation between the growth of the gdp in employment. and the current projections are in% by 20242025. it affects your family, my my children and their ability to get a job going for. i take it very seriously. >> senator king. >> think mr. chairman. welcome. i want to associate myself with senator corker and myself with local. it's too easy and really not an easy way to deal with the defense budget but it shouldn't be done through the borrowing and not paying for. also, i completely share your view, my particular concern is about interest rates. thread historic low right now
9:46 pm
and it's easy to chemically for everyone% it goes up were out money. and that can very rapidly eat up the entire budget in a hurry just by forces of which we have north no control. so so absolutely right to be concerned about that. let me talk about the issue of management. the title of your job is management and budget, most most of the day we been talking about budget. the chairman talked about overpayments of the federal government. another piece of that is under collection which is under dance high as five to 600,000,000,000 dollars. some people pay their taxes those who don't are paying their fair share. if you put those together 600,000,000 dollars a year, that would, that would eliminate the current deficit through better management. the problem is it's going to take more people to provide that
9:47 pm
management. you can expect the irs to improve their collection with fewer people. i hope that you will take seriously these opportunities. but you cannot move in two directions at once by reducing the federal workforce and expected more result in terms of monitoring overpayments are collecting more efficiently through the irs. >> i recognize that. it's a_point. please one point. please look at another way of increasing collections without having to hire more people is to have a simpler tax code. silly there's people who choose not to pay, their devious, devious, but there's a lot of folks who don't pay because it's really hard to do. it might make it easier to collect if we had attacks code that was easier for folks. >> i remember once there's a
9:48 pm
proposal the members of congress should have to prepare their own tax returns, that might solve these complexity problems. should tax cuts be revenue neutral? >> i've had a chance to sit and talk to the president about this. encourage him to look first and foremost at the effects of the overall economy. as i mentioned here today given the political situation we face given i think the best thing to do is to -- >> i would agree with that but there's this theology out there that lowering taxes equals greater economic growth. i have tried seriously to find economic studies to substantiate that. i haven't been able to find it. for the record, i would appreciate you supply whatever data you have are studies that have indicated that the case. the bush tax cuts last decade did not have that effect. the experiment going on in kansas is that it has not had
9:49 pm
the effect. i think we need to be careful with cavalier assumption that tax cuts will indeed stimulate growth and b cell funding. that's an idea that kicks around here but i don't think there's much data to support it. if it doesn't work you have only dug the hole deeper. if you propose tax cuts, 450 or 500 billion per year to increase defense spending you're talking about $1 trillion per year. >> i like rita's share that information as well. my commitment to stance and i look at the job seriously. i wanted take take a fact-based approach when advising the president. >> on the question of tax cuts, i had a friend of a guy in a hardware store tell me there's
9:50 pm
no such thing as a tax cut when you are in a deficit situation. if you cut taxes and borrow the money to fill the hole all you're doing is shifting those taxes to your kids. i think that's an important point. we have to be careful about this. that would not simply give ourselves a tax-cut and then lay it on our kids who will have to repay with interest. >> it's amazing about how much sage advice you can get in a hardware store. >> a particularly a maine. >> i like the ones in south carolina. but i will take your word. >> you voted against the tax ceiling and 2000 opportunity for conversation. we counsel the president. >> i will counsel the president on the ramification of raising the debt ceiling and not raising it and i feel like i can convey both arguments so he can make the best decision possible.
9:51 pm
>> i hope you'll take that series the because i've never seen any particular data are studies that indicate that violating the debt ceiling would be good for the american economy. thank you. >> think mr. chairman. thank you for being here. we talked a lot about the fact that we are $20 trillion in debt. looking at significant to debt in the next ten years. the canal with senator king brought up about the interest rate. i'd like to follow up with that and what is interest rate were paid now in the national debt? that as far as dallas but the%? >> i think the effective rate is run 2%. you're going to pay about 400,000,000,000 dollars in interest this year. >> we talk about the academy heating up which we desperately want but that will cause interest rates to go up. is it true that traditionally the debt is service to five or 6%. >> i think the average is about 6%.
9:52 pm
it has been a size 16 or 18. >> five or 6% as a conservative number that we can all agree on. what what is a cost for everyone % increase? >> a good rule of thumb is $200 billion per year. >> so you're talking about a tremendous amount of the money over a ten year period. >> as you get in a situation just like individuals get, so $200 billion is one third of our defense budget. >> that is correct. >> again, i think it's really highlights the importance of getting these things under control as my constituents understand. one. one of the things we can agree in the budget process the appropriations process is broken. here we are into almost february, the fiscal year started in october.
9:53 pm
we are not going to have this thing resolved for another couple months as far as fiscal your 17, much less fiscal year 18. so how do agencies, we talked a lot about government waste, how can you be efficient when you are facing that kind of scenario? so other senators and myself talk to you about the budget and things like that, to have any ideas as to how you can again, as the congress, attack the situation we have so we can make the process more efficient and ultimately save money. >> you're right. the government agencies most specifically the defense department struggle to operate efficiently under continuing resolution which is what we have done here under the last several years. as i have discussed with you and many members of the committee, reinvigorating the ordinary regular appropriations process
9:54 pm
should be a priority of congress and i hope to make it a priority to the administration and explained to the president why it is important appropriations work. not only for political purposes but for actual practical purposes and why having the appropriations bill helps others operate efficiently. i'm hopeful you will have whatever support you need for them the white white house to reinvigorate the a preparation's process. >> on the issue of improper payments which we talked about during your time in the house oversight committee he sponsored legislation to empower states to access treasuries. despite similar legislation being signed into law it appears omb has it to give states the access, can we look forward to seeing these resources been made available to states for their use? >> i think an advantage of having the co-author running in
9:55 pm
on beat you can count on the fact that we'll take that seriously. >> under president george w bush, on the institution instituted a rule requires any rules or actions which would increase the deficit be offset by other actions to reduce the deficit. president obama opted not to use this bill. will you go back to enforcing this? >> like to point out i believe that rule is attached to a debt ceiling debate as a specific example of how we do take that opportunity to try to reform our spending system. i look forward to advocating to the president that it would be fiscally sound to encourage that. >> one of the problems we have had not only in the past a ministration but it administrations in general is,
9:56 pm
as we ask for things from the omb, s for things from various agencies sometimes those are not given to us in a timely fashion. i know you have been frustrated with this as a member of congress. everybody in the room has been frustrated. will you tell us that you will be responsible into and so we can get the information we request? >> as i believe i mentioned, i have been on the other side of that. having been a member of congress and seen what it does to the way we operate over don't talk to each other and communicate is not help 20 buddy. it is not helpful to the people we represent. >> it thank you mr. chairman. >> senator murphy. >> thank you very much mr. chairman. another spent a lot of hearings
9:57 pm
in different parts of the building. and i wanted to start with where when she read for tea is a bold truth teller. i have behind me two pictures that were taken about the same time of day in 2009 and 2017. which crowd was larger, the 2009 crowd are the 2017 crowd? >> senator i'm not really sure how senator i'm not really sure how this relates to the omb but it does appear that they crowd on the left-hand side is bigger than the crowd on the right. >> thank you. the president disagreed with us in his news report. he said it's a lie. we caught them. we caught them in a beauty referring to the press reporting. doesn't look like 1,000,000 are million are a million and a half people. the reason i am where raising this is because budgets often
9:58 pm
contain various deceptions. we talked about that magic asterix. this is an example of where the president's team, something very simple and straightforward once to embrace a fantasy rather than a reality. in fact it has come up a lot because sean spicer, the press secretary said that the photographers framed their photos to minimize the enormous support on the malls. it was conspiracy thesis and went on to say it was the largest audience to witness an inauguration. i gather you would disagree with the press secretary. >> again, i am not familiar with the statements. i do agree the photographs were as you represented. >> thank you. chuck todd noted in this conversation with kelly and curry that the press secretary at the start start of the opposite present a falsehood and kellyanne conway said you are
9:59 pm
seeing off falsehoods sean spicer gave alternative facts. are you comfortable as you proceed as a key budget advisor presenting falsehoods as simply an alternative fact? >> as we discussed in your office, i have every intent and believe as shown until this time i might congress that i deadly serious about giving you hard numbers. i intend to follow through on that. >> one of the false fact that has been repeated in budgets is to say tax cuts to corporations and for the rich in america will increase revenue. i've gone gone through the numbers from 1981, 2001, 2003, i'm sure 2003, i'm sure you are familiar with this. did president reagan's 1981 tax cut increase or decrease revenue. >> we have had a chance to discuss that, i invite you to do as i commit to you to take a fact based approach to the
10:00 pm
budget, i would welcome any information you have on those types of matter. >> are you unfamiliar with the 1981 tax-cut? >> did revenue go up or down into three years. >> i honestly don't remember that. >> okay, it went down. the 2001 bushes tax-cut did it increase or decrease revenue? >> i do not know. >> it went down substantially. and his 2003 did it increase or decrease? >> i'm not familiar with the number. >> so if you review the #you see that this magic gift if we can cut taxes for the rich and powerful that will increase revenue, if you find that is false, we take that truth, the falsity of that often repeated claim and make sure the president know what is true and false. >> let me answer question this way. in order to do the best possible job to the president i think it is incumbent upon me to present him with all possible arguments on both sides.
10:01 pm
i have no reason to think you are lying to me, but if there is data that backs it up in academic studies i intend to use those just as if there's academic studies on the inside that argument. >> often the strategies used to say it's particularly true in republican administrations, that this is a way we can claim to be fiscally responsible by doing a lot of favors for very powerful people we like. i'm not talking about the many giveaways in the tax code for the very rich and powerful. there is a cbo study that they set an extensive list. it's a 2011 study and study and be happy to open the record and to make sure that you have a copy that goes through multitude of strategies to improving the deficit. but a lot of those things that would improve the deficit are the result of tax code positioned that are making the
10:02 pm
affluent. we take a serious look at these opportunities and not just be in the mode of cutting taxes on the rich and decrease services for struggling families. >> i think it was the senator in a and i told him that maybe he and the president were getting to the same conclusion by different road. that is the tax code needs to be reformed so it is fair and simpler. >> but a strategy that decreases taxes on the rich while decreasing programs for struggling families, which you oppose or support? >> my job would be to advise the president of the economic ramifications presented to him. is that just? decreasing taxes on the rich. >> again, i'm not in a position to give an opinion on a tax plan i have not seen.
10:03 pm
if you want me to look at giving for the rich and robbing for the poor. >> that is not what i am asking. >> under purdue. >> you don't really want to call me right now. i'm thoroughly disgusted. this is what is wrong, and i apologize to you, our congressmen, i have set in here for the better part of our meeting and i have to say this is probably one of the most blatant partisan committees i said todd. unfortunately it deals with the financial future of our kids and grandkids. would you agree that our budget process been on the house budget committee for six years. >> would you agree or disagree that the overall budget process is broken? >> s.
10:04 pm
i fully support your nomination, we have had a great opportunity to go through the questions and i have a statement i would like like to submit to the record. in 2000 under built clinton they spent $2.4 trillion running itself. that is all mandatory. last year we spent 3.7. one democratic administration, we we have exploded the federal government and 2.4 at the same time so i would submit the process is broken. as a matter of fact the evidence is there since 1974 we have only funded the government the way that budget act called for we have only done that as a congress four times. in those 42 years we have used 175 continuing resolutions to from the governments.
10:05 pm
as a matter of fact, over those 42 years up until 2000 we had 13 appropriations bill post 2000 we had 12. it shocked me to out the average number of appropriation bills is only two and a half per year i've been passed into law. you made a condiment earlier that you wanted the president of the united states to rely on that process. i would commit that it is a broken process that will not ever work. it contributes to the debts. in the last eight years we borrow 35%, and the next years we will borrow another 30% which will add nine and a half billion dollars to a 20 trillion-dollar debt. >> it is just that 5% it's untamable. there's no way that we can find.
10:06 pm
all this i we see is because it's broken. it does not not give us a politically neutral platform to have a debate about tax expenditures and tax cuts. about about all the things that they think is important. my question is very simple. i don't be i presume you will have looked at the budget. i've two concerns. we need help break into the gridlock in congress. can congress. can you do that promote be? does the office of omb to get today because of the total fraudulent dishonesty that this congress and never congress since 1974 perpetrated on the american people because of that withdrawal, on be in my opinion has overstepped was outlined and certainly in article two. are you concerned with this dysfunction congress that omb is
10:07 pm
restricting? >> i'm not familiar with that. >> we look at that? i would love to engage on. >> your first point about breaking the gridlock your point is well may. something congress will congress will have to drive the process home. again, i'll be encouraging the president to do what he can to allow the appropriations process to work. what is that mean? for the last several congresses various elements of congress have used the defense preparations as well as a hostage. we probably could have used that and it could've been signed with the president but it was held up attentional in order to leverage items and other appropriations bill. and so one of the things i would encourage the president to do is not only allow the appropriations process to flow but engage it to happen because
10:08 pm
it's the best way to spend tax payer dollars. >> i think you are nearing the end. i think i'm number 98. >> you must you must have a very big heart. in january 2013 you post federal relief for families and businesses in new jersey and new york that were hit by hurricane sandy. at the time he said it was because it was not paid for. the 2015 south carolina benefited from flooding even though is not paid for. in advocating for that relief you said that there will be a time for discussion about aid and how to pay for but that time is not now. as you probably know, california california has had its share of natural disasters. whether it be trout, forest
10:09 pm
fires or earthquakes. the result and safety hazards for millions of people and millions of dollars a damaged infrastructure and in some cases death. for me to consider your nomination as the director of on be the main personhood be in charge of assessing government spending can you show me that when natural disasters hit space bar to the controller california that you will be willing to put the immediate interest of people in need at the first priority for you, or will you insist the budget cut be made before providing critical assistance to those victims? >> thank you. a couple of different ways to answer question. i do believe there is a proper federal role in dealing with natural disaster relief. sandy is an example on it so large for one state or local government to deal with. >> and you would agree the need
10:10 pm
his immediate. >> that's what i want to point out i believe your quotation is accurate but i believe the circumstances that i believe i was asked by the media on the day of the event how is going to pay for this. that gave rise to my response. there will be a discussion but the time is not now because the event is happening. not at the time we appropriated the relief. on the relief or south carolina believe my position was consistent. i wanted to help the people who are injured. >> can you ensure me that if a natural disaster hits other states like california for example, that that you will not hold up relief for the state waiting to determine whether there'll be budget cuts in order to provide that relief, are you going to sit back and crunch the numbers while people are waiting for help? >> i see my role as advising the president. here's what we've done in the past here's how it's worked out and how i think we
10:11 pm
should proceed and here's why. whatever the president says to do i will enforce. >> even if the governor of that very states suggest you that people may be harmed because of that delay? >> i can only imagine that would carry a great deal of weight to the president. my responsibilities to the president of the united states. september 2016 you voted against funding for the zika outbreak. then on facebook he said quote do we really need government funded research at all? i assume you assume you must be in favor of supporting american innovation and new industries, secretary? >> correct? >> yes, generally. on the zika matter i do recall that. >> and i'm sure you agree that scientific innovation and breakthroughs can create entirely new industries which will spur growth and economic development. >> i think american history
10:12 pm
shows that to be true. >> let me lead you what a globally leading scientist says about this issue. america has made big scientific breakthroughs for decades because federal funding allow scientists to pursue research that businesses would not fund because they have no immediate commercial application. breakthroughs from federally funded curiosity driven research i'm not only created new business but entire new industry. that is a quote from a woman who happens to be at the university of california and one of the breakthrough prize for advances in genetic. you grew that statement? >> i don't recall the entire statement but generally i do believe that there is a proper role for the federal government research. i think you hit the hit the nail on head" we said the private sector would not go in. and i have supported that. >> nsf and nih spent more than
10:13 pm
$4.4 billion in research for california in 2016. this money his double some of our nation's most difficult's most difficult diseases and scientists are trying to discover new ways to provide food, water, and energy for our nation's growing population. do you believe government funded research should be a priority? >> when we look at grant programs like the one you mentioned it's not the amount of the grant that it's over getting to the taxpayer dollars. >> so you're not opposed to government funded research for scientific research. >> i have supported things like orphan diseases and we can talk about that more. >> thank you. >> thank you for your willingness to serve and your family and thank you for your willingness to serve as well. as a public service commitment. we came into congress together i remember hearing your thought process about how we can make
10:14 pm
this be a government and i commend you for your time in the house and the work that you have done. and while not always agreed with everyone sometimes being accused of being a thorn in the side of of sun you have never been one to pride himself in being a thorn but has worked his way to finding a solution. somebody will find a way forward given the challenges this country faces. we have difficulties like today when you have a congress committee hearing foreign relations committee that was served on nick nikki haley's nomination today. i only gets to hear parts and pieces of the questions. committed to this committee at times i've heard several questions you asked was can lead
10:15 pm
me to conclude that some us believe that you only think we are a better country if the poor get poorer. that's incorrect. i think what i've heard from some people here the inequalities of this country will disappear. it has actually increased the challenges of this country. if the wealthy become a theory of the last eight years? >> yes, yes, sir. >> so it's not increasing taxes that were the problem because that happened over the last eight years. in some respects. if we decrease taxes and regulation that will lift everyone out up, set correct? >> there used to be a democrat around this at a rising tide raises all ships.
10:16 pm
so does overregulation hurt our economy? >> it does speemac's earning doubt that it hurts the economy? left or right? do they bloom it's back? >> no. it's encouraging as i talked to members of both parties that there seems to be common ground and bipartisan work in favor of fragmentary relief because we see it from our constituents everyday. >> does economic growth help the budget? >> everybody. >> so you can help the budget. is there any debate on that? >> they suggest that regulatory cost is one of the most regressive taxes that we have. false most heavily. >> and there's no university think tank that says we will grow our way out of the budget problem. >> i have never seen that. >> do agree that we are in a state of overregulation? >> i do. >> seems that the entire premise i've listened to at least in the times i've come in and out of the committee. the talk of very different approaches story budget and economy.
10:17 pm
i think everybody agrees with that. we have a significant debt of outstanding liabilities on a balance sheet today. >> almost $20 trillion. that's what reported. if you wanted to project it could be closer to 100. on the ones. >> and there's no way under current economic growth that we have a way to pay for that most obligations? >> i don't believe so. >> one of the ways i think we could grow the economy's legislation that senator leah knight introduces called reducing the excessive government act. i did that if we increase the debt limit which this place has done, if we increase the debt limit that we ought to decrease the amount of regulations on the economy is some degree to help grow the economy as you have identified which helps the budget. ideas for every 1 dollar into limit increase you reduce
10:18 pm
regulation by 15 percent. is that something we can work with you in question. >> i would love to see something on my. as i believe the best thing we can do immediately to help the economy which of reform the regulatory climate. >> anything we have talked about when it comes to budget is finding ways the private sector can reduce spending. one of of the things we talked about his energy savings performance contract. think about what we can do with the private sector without spending a dime of taxpayer funding. we can say $20 billion in taxpayers funding by making our buildings more energy efficient. where you pledge to continue to work with this administration on that? >> it that would be easy. one of the first bills i wrote was with my friend on that topic. >> thank you for your perseverance i look forward to working with you.
10:19 pm
>> another senior person on the committee, and very patient senator murray. >> thank you very much. welcome congressman. i know we haven't had a lot of time to do a one-on-one meeting. a look forward to being able to do that. i want to be very a front and i have serious concerns with your nomination. i am of course troubled by a failure to pay taxes and comply with the law over time of several years and it's not credible to me that it never crossed your mind before now that you might oh taxes on behalf of your household employee. i think think the failure to pay taxes underlines the need for all committees to require tax reform from our nominees is democrats are asking in the committee that i'm on another site don't receive
10:20 pm
taxes. unpaid taxes are not my only concern with your fitness for this job. i'm a former chairman of this committee, very proud of the work that we have been able to do to reach across the. and to move away from the constant budget crisis. we are able to do that because we set aside some serious differences and work to find common ground. frankly, i don't see see a similar willingness to do that in your background. you are a member of the tea party, correct? >> i'm a member of the tea party caucus. >> you supported shutting down the government in the fall of 2013, correct? >> in all fairness i think that's over supplication. i do believe believe that the house bill that passed was a good bill. i thought it could've delayed the mandate for a year. the center refuse to take that up and as a result there is a lack of appropriations with which they now call a shutdown.
10:21 pm
>> and you opposed the subsequent bipartisan deal that i reach with now speaker ryan later that year to keep the government open, correct correct. >> i opposed the approval of the deal and then voted for the deal that grow out of it. >> and in fact you oppose the budget control act and the 2015 deal? >> that is a true statement. >> to acknowledge that you will have to work with democrats in the next round of budget? >> sure. i worked with democrats anytime in the past. i have no concerns about my ability to do that. >> so will you commit to pushing back against the tea party if they pressure you to not work on a bipartisan basis? >> my commitment is to the president of the united states. my commitment right now is to the 750,000 people i represent south carolina. a very conservative place and they like the job i've been doing. my boss would change upon confirmation my commitment would be to represent the president of the united states to the best of my ability.
10:22 pm
>> images say that there are reports the transition team is preparing a first trump budget with a ten and a half trillion dollars spending cuts. and i put those two things together and clearly to me we are headed right back to more tea party extremism and ideological. the, dysfunction and partisanship and all that went with that. that approach is going to have very harmful consequences. i want to get one small example. i was honored honored to participate in the women's march on saturday. i want those that are watching this to know that i stand ready to do whatever it takes to protect the health and safety of women. so i was outraged to actually read that ten and a half trillion dollars in cuts is built from a blueprint that among other massive cuts that we can talk about, would eliminate eliminate the funding for the violence against women act that help support survivors of sexual assault and violence.
10:23 pm
is that really the message this new administration wants to send to women? >> i read some of the same newspaper reports but i am not familiar with the details of the the budget. my understanding is that is, there's some strange rules that i'm not familiar with on transitions, i'm not allowed to see the details on that. >> while just say, i still am outraged at the, that was was recorded by president trump where he was bragging about kissing and groping and having sex with women without their consent. those kind of cuts would double down on that type of behavior. i would just say that i hope one of the first actions of this president is not to eliminate the very funding that protects women against violence. let me just ask you this, have you previously supported eliminate funding for that? >> i voted against a lot of funny bills. i'm not familiar if there's a specific one on funding for paula.
10:24 pm
>> let me just say, would you commit today to oppose, eliminate or protect women from violence? >> my commit men is to try to advise the president to the best my ability and then enforce the policies he sets. >> as someone who has sat in that chair and knows the numbers, and do not believe that you can cut ten and a half trillion dollars without having serious impact as senator sanders talks about all the time i medicare, medicaid and social security. but also on programs that are extremely important to protecting people in this country, many who are in the streets last saturday. >> inky. i think that completes the first round. we begin the second round and we have a deadline of 1:30 p.m. for
10:25 pm
completing this route so he can get ready for the homeland security questions at 2:30 p.m. i'll begin the second within easier question. how does this hearing compare with the bar exam? >> a good friend of mine and law school roommate is here we took the exam together and he came to giving moral support. it's very similar except it's on television and my mom and dad are watching. that makes it a little different. >> we appreciate your willingness to serve. one of the things this committee is working out is trying to come up with a budget process that will make a difference. one of the problems that we noted was the president's budget budget is not the same as the
10:26 pm
congressional budget which is not the same as the appropriation spending, which is not the same and some of the departments to any of those. after we looked at it, we came up with the impression that maybe that was intentional so that nobody could follow the dollars. so, i hope that you would agree that it would be helpful to harmonize the format of the presidents agenda with the congressional budget and with the appropriations budget, particularly with the department of defense. they haven't been able to have a clean audit yet. >> it goes deeper than that mr. chairman. we do get a chance to talk about the data act and some of the reforms that we try to put in place on a bipartisan basis. it's as if the computer systems are set up to not allow the men and women working there to understand how the money spent spent. there's a lot of structural reforms that we could put in place and ownby could drive in order to make it easier to understand how the government
10:27 pm
works. were living in the age of big data and interior at the federal government have the best big data available anywhere but we can't use it because nobody can share to read it. >> another thing that we talked about is having a capital budget what we found out is we don't even know what the federal government owes, let alone how long it will last and when we need to replace it. and and of course we replace everything out of cash. what he think about having a capital budget? >> i remember when i got here one of my businesses i was familiar with budgets and there is no capital budget. there is no budget versus actual. there is no this year versus last. ultimately you can find them deep down in the appendices.
10:28 pm
one of the things i struggled to explain to my friends in the private sector that the government budget process is similar to the private sector budgeting we were familiar with in the word only. they both use the word budget but the systems they describe are different. not to say that you could entirely run the government like a business or you can budget for like a business, but there are structural inefficiencies in the way our budget and appropriation system could benefit from more exposure to outside forces. >> i look forward to working with you on that. talk to bit about having a gdp number and guardrails to work into the future to get that balance budget and to keep our government afloat. senator kane has been a strong advocate on that. we've had bipartisan things that we
10:29 pm
thought could help straighten things out. another thing was -- budget in which we don't seem to be able to make it through the process every year. maybe we can make it once every two years. one of the provisions i put out is having the budget divided into the 12 budgets into 12 halves. to have any ideas on things that we might do with the budget? >> i remember that conversation because he put a house member and a very difficult situation. after a bit the senate bill might be better than the hospital. i was a cosponsor of the biennial bill on the house. is very intrigued by your comments and ideas about taking that to your budget and looking at it so you had rolling appropriation bills of six each year for two years. and allowing the process to still function, giving the process the difference in the
10:30 pm
respect it deserves. the same time to a budgets to which is to increase the horsepower available to do oversight on the budget process. i was enthusiastic about it and look forward to talking to the president if given the chance. >> when you're confirmed i look for to working with you on these things and hope we can pull the committee together for good bipartisan suggestions to help improve knowing where we are and where were going. . .
10:31 pm
over and over again and i suspect he won based on that promise. do you disagree, that is certainly your right. you believe we should raise the retirement age and you voted over and over again to vote in one way or another. when you talk to the president of social security, medicare and medicaid, and you tell the president that it's more important that he keeps faith kh with democracy, keep faith with what he told the american people or should he acknowledge that he lied and change his views and cut social security? >> i have no reason to believe the president changed his mind during the campaign as we talked about here today. my job is to do the same as the
10:32 pm
introduction which is to be completely brutally honest. >> do you believe the president will keep his word and not cut social security, medicare and medicaid? >> you know and i know and everybody else knows no matter what our politics may be, this ought to discuss the politics in america today. people run for office and get elected and do something else. would you tell the president that it's more important to keep faith with the american people or do what you think is a better policy? >> you are asking the wrong person.
10:33 pm
my role would be to advise the economic ramifications. >> let me ask you this. we talked a lot about the deficit and the debt and important issues. what we have nobut we have not s the grotesque level of income and wealth equality in america but we haven't talked about from the 1985 to 2013 there's been a massive transfer of wealth from the middle-class t middle classe tenth of 1%. my question is when we talk about the budget we have multibillionaires like donald trump proudly tell the american people a nickel in federal taxes and yet we have people talking about cutting social security, medicare and medicaid. do you think it's more important that we tell billionaires like president trump and others that
10:34 pm
withheld the multinational corporations like general electric and others in a given year who didn't pay a nickel in federal taxes because they harbored their money in the cayman islands to you think that it's more important to tell the rich and powerful but maybe they should start paying their fair share of taxes before we could social security, medicare and medicaid and the violence against women act? >> the most important thing to tell people is the truth which is what i see my role being. >> is it true that over the last 30 years we have seen a massive shift in wealth from the middle class to the top one tenth of 1%? >> if you give me a chance i will agree and say i do believe income inequality is growing. >> they are earning almost as
10:35 pm
much as the bottom 90%. so, my question is given that massive level and having people like president trump not paying a nickel in federal taxes or wanting to cut programs for the elderly or the sick and the poor don't you think maybe we want to go to the very wealthy. i did enjoy the conversation if you ask me the disparities between the most wealthy and the worst off, i'm more concerned in the wealth controlled by the folks -- >> the middle-class wealth has shrunk in from 1985 to 2013. the bottom 90% has seen its share of wealth go down from 35%
10:36 pm
to 22.8. that is a huge contraction of wealth and middle-class is it not? >> use all the ideas of how to fix that problem. >> what i saw were millions of people saying that we don't want more tax breaks for millionaires. >> let me show you another chart in the grand traditions of kent conrad. this is a fairly self-explanatory chart. the life expectancy, starting at 72 years of life up to 86 years of life and across the bottom is the amount the society spends on health care going from $0 per year per capita for $9,000 per
10:37 pm
year per capita. and the thing i take away is this data from 2014, the latest we have. what i see in the graph are these boxes right here that i shaded slightly just now with my pen and that covers a country whose life expectancy between 80 to 84 years and if you are in that box coming for per capita expenditure is 3,000 to $5,000 as you can see the bulk of our economic competitors were in that box and here we are. we are out here. i may be leader in american exceptionalism, but not in this way because our life expectancy is the equivalent to croatia and
10:38 pm
czechoslovakia. that is and where it should be compared to our competitor economies. our spending is worse than switzerland and the netherlands which is the least efficient end oandthe most expensive per capia healthcare systems among those nations. >> so it seems to me that it should not be asking too much of us to try to get into a place where we are competitive with england and france and germany and australia and so many other countries who managed to provide good health care to the populations at a reasonable cost. >> with that background, i think what i am trying to urge you hear is when you go back to the other graph, everybody else is super excited on the republican side figuring out how to cut the whole program, block grant and
10:39 pm
medicaid, but fewer people and medicaid so you could cut it and reduce benefits but it seems to me if this is going to be the focus even though it's a smaller number than the tax cuts going out the backdoo back door we tad about in the special-interest been an interesting that number how do we get to be more like what so many other civilized and economically developed societies figured out what to do to reduce the cost of care should be a prime mechanism in making that adjustment with that number. the whole prospect of the reform is making progress and the primary care providers and rhode
10:40 pm
island have reduced the per capita expenditure for their patients. one by 4 million in a year. those are real reductions in cost and accompanied by better service to their patients. they are accompanied by having nurse managers on at night to take phone calls and accompanied by being engaged more with the patient to make sure they stay healthy. a little bit like the article from the recent new yorker. the primary care stuff works if people are compensated to have the right flexibility to actually treat their patients as human beings, and not just ways to grind the machine for money and everybody is better off. i know our friends want to have
10:41 pm
more of all of this political brouhaha. that is a fine site if you want to have it, good luck to you. if you want to drive into the wreck, great. but if you pay attention to the delivery system reform and increasing the ways that we improve the quality of care and increasing information in the healthcare space and increasing the way in which we compensate doctors for keeping people healthy not only will you make a big difference on that graph or bring down what you say is the biggest cost in the out years just healthcare expenditure also find an open lane with all of us because there is room for progress. can you comment? >> it's always nice to find another graph fanatic.
10:42 pm
i look forward to working with you should you come for me. i would like to take the graph to show him that i would hope that you would understand it does have some weaknesses and assumes the direct causal effect between the two components on the graph and i think you might agree there's other things that might contribute to the life expectancy of the van just healthcare. >> two items for the record i would like to put into the record on the chart. it was published in the "washington post" that the federal reserve is showing the federal workforce is at its lowest as a percentage of the total workforce in seven years and second, the report of repealing the affordable care
10:43 pm
act. >> it was right at the end of the first line of questioning on climate change and from your work on your face you were thinking wait a minute i just wanted to come back to it. we spend a lot of money dealing with climate related issues dealing with the sea level rise in virginia to try to move infrastructure around because the sea level rise or other climate conditions. that's why i asked th you the question and to agree or disagree with something that had a couple of facts. climate change driven by the co2 emissions is a huge risk. you disagreed with my premise, my factual premise. that was your statement. do you disagree that there is climate change and it's driven partly by the human generated co2 emissions or do you disagree that it's a huge risk or with
10:44 pm
all three of those things? >> i still try to come back to the issue of how this relates to omb and i think i found it. you will put these investments in the budget or not? >> what you described are costs or benefits depending on the equations that you are under and what i see my jaw as doing is analyzing the costs and the benefits of the various regulatory policies and legislation. if a house or th the house or to pass climate change regulation that would brief the president on those issues and i see that one of the rules i would have is to lay out the cost and the benefit of the present. my opinion may enter into -- if you don't believe in climate change 20 proposing investments to help military bases in with
10:45 pm
the effects of climate change. if you don't believe in effect, you won't be proposing budgetary allocations to deal with it, so i am curious on this factual question, do you accept climate change is caused at least in that first? >> i recognize the fact there were some signs that indicate that and i am not yet convinced that it's a direct correlation between the man-made activity and the change in the climate which i can believe is real. >> did you have anything to do with the first executive order that increased fee the fees on e low and moderate income home buyers by a about 500 a year. i've asked witnesses this. the obama nominees have not yet gotten a coherent answer.
10:46 pm
how do you look at that question? when i was the governor, we never looked at the number. we looked at ratios of debt to state gdp or we looked at a ratio as the germans of the debt service payments. but when i asked every witness that appears before the committee what level of death is acceptable andebt isacceptable s dangerous, nobody gives me a coherent answer. there is probably some disagreement as to the specific level of academic research i've seen. i've seen research 65% of gdp to 105% and that is for the publicly held debt to gdp.
10:47 pm
it seems like the sweet spot is about 85%, which is about where we expect to be in the current projections in six or seven years if we make no changes. beyond that, it's well see some evidence of the concept of crowding out any level of debt to go into the public debt market is not available for private investment so you see some crowding out but at what point does that sort of really start to negatively impact? now we are spending $400 billion of shared interest instead of spending on programs you might prioritize. the evidence would indicate the point of no return may be 85% of gdp.
10:48 pm
>> thanks for answering the question. >> thank you. senator merkley. >> thank you mr. chairman. i want to turn to the consumer financial protection bureau. it is a sad, sick joke. millions of people have gotten reimbursements back because the cfp b. hacpb has held financials accountable to the law. consumers bought they had nobody in the square fighting for them making sure that there were honest dealings with financial organizations. do you still believe that it is a sad and sick joke?
10:49 pm
some of the most offensive concepts in the government which is almost completely unaccountable government bureaucracy, government regulatory agency. one of the most frustrating experiences i've had is people walking into my office and asking me for help in having me look them in the eye and say i'm sorry there is no way under any circumstance that i can help you and that's what i've been forced to do because they are off appropriations and we don't budget for them. they are run by a one-person dictator that believes he can't be fired by the president but for cause. you don't like the structure but when you look at the fact that they've returned millions of dollars a thro front organizatis
10:50 pm
that admitted that they had misled borrowers were cheated and outside of the law isn't that a good thing to have somebody holding those folks accountable? >> there is no evidence that it would have been reached as before and as you know, the cfp b. took over the functions that are already being performed by the agencies and there is evidence that they failed miserably in high circumstances or high-profile circumstances such as the wells fargo debacle. where i think they may have been resident for four years and still failed to discover the wrongdoing that was taking pla place. it says that it is driving up loan repayments for millions of
10:51 pm
students. do you consider that to be a positive thing that we have an organization that is taking on actions that are deliberately misleading the students that have loan debt? >> it would have an organization to enforce the law. i question whether it is the best way to do that were taking place and it would remind everybody that discusses this issue that what is alleged and has no circumstances in one way or another is already against the law and would be regardless whether it existed. >> one of the challenges we have is an ordinary transactions, companies have losses that make it impossible to have any leverage. the individual has to go to someone selected by the company. and that individual doesn't get business unless they find the companies we have submitted a
10:52 pm
terribly rigid system. it's taken on misdeeds in the groups. you see that fast enough on wells fargo but they've acted more quickly than any other agency and you also said that just the same would have happened in the previous period, but that is not the case. we didn't get this kind of action before. we didn't get $12 billion returned to 29 million. so given the 29 people out there today that have benefited, you have a dispute over the structure of the funding of the board. i hear that, but isn't that kind of looking at the tree and not the poorest -- forest? >> it is an agency that is not accountable to the people it is supposed to serve.
10:53 pm
the large financial institutions do not want there to be a consumer watchdog that holds them accountable. we finally have that consumer watchdog and we know what would happen if we structured it differently. not you personally, but congress with the enormous cloud. the board of that has worked for all kinds of organizations where there is no quorum to tie and no question this was actually worked. from small local banks and credit unions not every
10:54 pm
government agency for together. >> it is an important debate because the president campaigned on fighting for working people so they sounds like you are going to say no, don't help working people, help big thanks. i got an inspector general for the cfp b.. i would love to committee to have a full examination including inviting the public to come and testify about the many times but this is onl only thane two-way seeking justice. the testimony of other people that showed up to ask questions and i have several letters i
10:55 pm
want to make part of the record in support of the nominee. without objection, i want to thank the witness. all questions for the record are due by 6 p.m. today with a hardcopy delivered. under the rules, the witness will have seven days to respond with answers. with no further business, the hearing is adjourned.
10:56 pm
>> [inaudible conversations] the second confirmation hearing of the day at the nominee took questions from members of the senate homeland security committee. here's a look. >> what were you thinking